Skilled Nursing Facilities (SNFs) are facing problems with high turnover and staff shortages. The impact of these two labor market problems is that most SNFs do not have adequate direct care staff to provide a basic level of care for residents. Increasing demand and a decline in the supply of labor will make this situation worse in the future. Recruitment and retention are difficult because of low wages, low benefits levels, and difficult and dangerous work. How wage and benefit increases affect the labor force participation decision, as well as the hours worked decision, depends on how responsive labor supply is to changes in wages and benefits over time. Specific research objectives include: 1) To determine how the probability of choosing to work as a Certified Nursing Assistant (CNA) in healthcare (labor force participation) changes as wages and health insurance availability changes; 2) To determine how the number of hours worked as a CNA in healthcare changes as wages and health insurance availability changes; and 3) To determine how changes in the unemployment rate affect how this workforce responds to changes in wages and health insurance availability. The data for this study will come from the Current Population Survey Annual Demographic Supplement (CPS-AD) for the years 1994-2002. This time series will allow for variation in the unemployment rate, as well as variation by state in key Medicaid financial and regulatory measures. Economic theory of utility maximization and a work-leisure model can provide estimates of this response, which are essential for policy makers to know as they consider policy options such as mandated wage increases, minimum staffing ratios, subsidized health insurance coverage or other options meant to address this crisis in care.